ENTREPRENEURIAL
VENTURES
MODULE 4
CREATING NEW VENTURES
New-New Approach New-Old Approach
Introduction of New Improving a Product or
Products/Services into a Offering a Service in an Area
Market Where it is not Currently
Available.
ACQUIRING AN ESTABLISHED ENTREPRENEURIAL VENTURE
PURCHASE AN RATHER THAN
EXISTING BUSINESS STARTING ONE
Personal Preferences Examination of Opportunities
• Background • Business Brokers
• Skills • Newspaper Ads
• Interests • Trade Sources
• Experience • Professional Sources
ADVANTAGES OF ACQUIRING AN ONGOING VENTURE
Reduced Time &
Effort
Less Fear about the Successful
A Good Price
Future Operation
EVALUATION OF THE SELECTED VENTURE
Key Questions to Ask: Asking the right questions is critical.
How many of the
employees will What does the firm’s
What is the current financial picture look
physical condition of remain?
like?
the business?
What is the condition
of the inventory? What type of
competition does the
business face?
Why is the business
being sold? What is the state of the
company’s other
assets?
FRANCHISING: THE HYBRID
A franchise is an
arrangement in which the
owner of a trademark, trade
name, or copyright has
licensed others to use it in
selling goods or services.
HOW FRANCHISING WORKS
The Franchisor usually provides: The Franchisee usually contracts for the
following business package:
•The company name
•Symbols, logos, designs, and facilities •Make a financial investment in the operation
•Professional management training •Obtain and maintain a standardized inventory
•Sale of specific merchandise necessary for and/or equipment package
the unit’s operations at wholesale prices •Maintain a specified quality of performance
•Financial assistance •A franchise fee
•Continuing aid and guidance •Engage in a continuing business relationship
ADVANTAGES OF FRANCHISING
The franchisor gives you The risk of business
support failure is reduced
A franchise enables a small Products and services will
business to compete with have already established a
big businesses market share.
No prior experience is You can use a recognized
needed brand name and trade
mark.
ADVANTAGES OF FRANCHISING
You usually have exclusive Financing the
rights in your territory. business may be easier.
You can benefit from Relationships with
communicating and suppliers have already
sharing ideas with, been established.
and receiving support
from other franchisees in
the network.
DISADVANTAGES OF FRANCHISING
Costs may be higher than The franchise agreement
you expect usually includes
restrictions on how you
can run the business
You may find that after The franchisor might
some time, go out of business.
ongoing franchisor
monitoring becomes
intrusive
DISADVANTAGES OF FRANCHISING
Thorough recruitment You may find it difficult
process to sell your franchise
A percentage of sales is The inflexible nature of a
usually shared with the franchise
franchisor.
3 take-aways from the
discussion